| In the development of enterprise, M&A is an important way of expansion. M&A in Chinese capital market first starts at1993and develops very quickly in the following20years. Since M&A is a transaction, the core issue should be pricing, and for M&A pricing, the key is premium. This article uses indicators which can reflect synergy effect theory and control theory,two theories often used to explain M&A premium of western companies, to see if they are also influencing factors for Chinese companies. Through the correlation analysis and regression analysis of51M&A cases which happen between Chinese listed companies from2001to2010, the article gets following conclusions:(1) Horizontal merger and vertical merger do not necessarily leads to higher premium, thus operational synergy is not the main concern in M&A(2) Use equity as a payment in M&A will lead to higher premium compared with cash payment, target with negative net profit will also attract higher premium, so financial synergy is an incentive for paying premium(3) Premium paid is positively significantly correlated to shareholding ratio after M&A, thus premium reflects benefits of control. |
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